Wider economic impact

Mobilising private investment in infrastructure can have wide reaching and transformative effects on economies

Enabling business growth and job creation

Improved energy supply, transport networks and telecommunications are essential for businesses to grow, create more and better jobs and raise tax receipts for governments. Reliable measurement and attribution of local business growth is outside the scope of project reporting, but has been identified as a priority for further PIDG research and evaluation. PIDG will take this forward in 2017 with an initial focus on the economic effects of improved energy generation capacity, building on a growing body of research conducted by PIDG partners and co-investors in 2016. This will improve how it understands the impact of improved energy generation, in terms of enhanced domestic access to energy, better essential services and economic growth and job creation.

Boosting fiscal revenues

PIDG projects provide direct contributions to local and national governments through upfront fees to governments, corporate taxes and consumption and sales taxes. In cumulative terms, they are expected to generate $7.1bn in fiscal benefit of which $3.4bn comes from upfront fees paid to governments.

Improving investment flows in frontier markets

PIDG companies seek to close financing gaps for infrastructure, both through direct projects in partnership with government and private sector investors and through knock-on effects on local markets. PIDG adds value in a number of ways; in addition to providing finance and taking on financial risk directly, it works intensively to build the capacity of actors in local capital markets including government and project developers, and pioneers new investment models in frontier markets. The combination of enhanced local capacity, new mechanisms for investment, and the demonstration effect of PIDG projects provides a foundation for greater levels of investment in local markets as well as follow-on finance for PIDG projects and wider infrastructure that may subsequently be supported without PIDG involvement.